Ameristar Casinos, Inc. (NASDAQ: ASCA)
- Net Revenues declined YOY by $7.3 million
(2.5%) for 4Q and $19.3 million (1.6%) for the year
- Adjusted EBITDA decreased YOY by $3.9 million
(4.6%) for 4Q and $3.6 million (1.0%) for the year
- Majority of properties improved both 4Q and
Full-Year Adjusted EBITDA Margins YOY
- Adjusted EPS increased YOY by $0.11 (52.4%)
for 4Q and $0.36 (20.7%) for the year
- Progress made toward completion of pending
merger with Pinnacle Entertainment, Inc.
Ameristar Casinos, Inc. (NASDAQ: ASCA) today announced financial
results for the fourth quarter and year ended Dec. 31, 2012.
Fourth Quarter 2012 Results
Consolidated net revenues for the fourth quarter decreased year
over year by $7.3 million (2.5%), to $288.8 million. New
competition in Kansas City and a more challenging competitive
environment in the Chicagoland market adversely impacted the
quarterly results. Net revenues for Kansas City and East Chicago
decreased $4.5 million (8.1%) and $2.0 million (3.7%),
respectively, representing 88.1% of the consolidated net revenue
decline from the fourth quarter of 2011. The Jackpot properties had
a year-over-year net revenue decline of $0.8 million (5.8%), mostly
as a result of lower than expected slot hold. The year-over-year
variances in net revenues at the other four properties were
relatively modest, with declines at Council Bluffs and Vicksburg
and increases at Black Hawk and St. Charles.
For the fourth quarter of 2012, consolidated Adjusted EBITDA
decreased $3.9 million (4.6%) from the prior-year fourth quarter.
The combined effects of new competition in the Kansas City market,
a favorable property tax adjustment in Black Hawk in the prior-year
fourth quarter and a year-over-year increase in the gaming tax rate
in Colorado accounted for $3.1 million, or 80.8% of the
year-over-year consolidated Adjusted EBITDA decline. The balance of
the decline is substantially attributable to $0.7 million in
expenses related to our recently terminated efforts to pursue a
gaming license in western Massachusetts, as Adjusted EBITDA at each
of our other properties and other corporate expense were relatively
stable year over year. Fourth quarter 2012 Adjusted EBITDA excludes
the impact of an $8.6 million impairment of the land value in
Springfield, Massachusetts, $6.7 million in merger costs, $0.9
million in expensed design costs and $0.2 million in
non-capitalizable costs associated with the development of our
luxury casino resort in Lake Charles, La.
Consolidated Adjusted EBITDA margin decreased from 28.4% in the
fourth quarter of 2011 to 27.8% in the current-year fourth quarter,
which is within what we consider to be the normal range of
fluctuation for our operating performance due to the uncontrollable
nature of various factors that can affect revenue and certain
expenses. We generated operating income of $32.5 million in the
fourth quarter of 2012, compared to $44.1 million in the same
period in 2011.
For the quarter ended Dec. 31, 2012, we reported net income of
$1.2 million, compared to net income of $7.4 million for the same
period in 2011. Diluted earnings per share were $0.04 for the
fourth quarter of 2012, compared to diluted earnings per share of
$0.22 in the prior-year fourth quarter. Our Adjusted EPS of $0.32
for the quarter ended Dec. 31, 2012 represents an increase of $0.11
over Adjusted EPS for the 2011 fourth quarter. The year-over-year
improvement in Adjusted EPS was mostly attributable to a lower
effective income tax rate and a reduction in non-cash stock-based
compensation expense, which was elevated in the 2011 fourth quarter
from the accelerated recognition of expense resulting from certain
equity award modifications.
Our St. Charles property posted year-over-year growth in all
three of our key property financial metrics -- net revenues,
Adjusted EBITDA and Adjusted EBITDA margin. As anticipated, an
Interstate 70 bridge maintenance project resulted in the closure of
four of the 10 lanes near our property commencing in November 2012
for approximately one year. Although disruption from this
maintenance project did not appear to significantly impact the
property's performance during the fourth quarter of 2012, the
nearest competitor underwent an ownership change at about the same
time as the partial closure of the bridge, and this competitor was
closed intermittently during the transition to facilitate system
changes. The competing property is currently in the process of
rebranding and is undergoing some renovations to its casino floor.
As a result, the fourth quarter results may not reflect the level
of disruption our St. Charles property will experience from the
bridge maintenance project for the duration of the project.
Full Year 2012 Results Consolidated net
revenues for fiscal year 2012 were $1.20 billion, a $19.3 million
(1.6%) decrease from $1.21 billion in 2011. Consolidated Adjusted
EBITDA for 2012 declined $3.6 million (1.0%) from 2011, to $361.6
million. Slightly more than one-third of this variance is
attributable to $1.3 million in expenses related to the
now-terminated pursuit of a Massachusetts gaming license. Excluding
those expenses and the results of our properties in Kansas City and
East Chicago that were adversely impacted by the competitive
environment changes for most of 2012, annual consolidated net
revenues and consolidated Adjusted EBITDA improved year over year
by $6.4 million (0.8%) and $4.1 million (1.7%), respectively. In
2012, Black Hawk, Council Bluffs and Vicksburg improved from the
prior year in all three of our key property financial metrics.
Our efficient operating model produced an increase in
consolidated Adjusted EBITDA margin from 30.1% in 2011 to 30.3% in
2012, notwithstanding the Massachusetts development expenses. The
majority of our properties improved Adjusted EBITDA margin from
2011.
For the full year, consolidated net income increased from $6.8
million in 2011 to $76.3 million in 2012. The pre-tax impairment
charge of $8.6 million relating to the Massachusetts land
negatively affected 2012 net income by $5.1 million on an after-tax
basis. A pre-tax loss on early retirement of debt of $85.3 million
($55.1 million on an after-tax basis) adversely impacted 2011.
Adjusted EPS was $2.10 for the year ended Dec. 31, 2012,
compared to $1.74 for 2011. Adjusted EPS for 2012 was favorably
impacted by the reduction from 2011 of approximately 7.4 million
weighted-average diluted shares outstanding, a lower effective
income tax rate and a decrease in stock-based compensation
expense.
Ameristar Casino Resort Spa Lake Charles
Construction of Ameristar Casino Resort Spa Lake Charles began on
July 20, 2012 and is expected to open in the third quarter of 2014.
The resort is being developed on a leased 243-acre site and will
include a casino with approximately 1,600 slot machines and 60
table games, a hotel with 700 guest rooms (including 70 suites), a
variety of food and beverage outlets, an 18-hole golf course, a
tennis club, swimming pools, a spa and other resort amenities, and
approximately 3,000 parking spaces, 1,000 of which will be in a
garage.
The cost of the project (including the purchase price) is
expected to be between $560 million and $580 million, excluding
capitalized interest and pre-opening expenses. Through Dec. 31,
2012, total invested capital in the Lake Charles project was $107.4
million, including purchase price, capital expenditures and escrow
deposits. To date, we have not made any borrowings under our
revolving credit facility related to the Lake Charles project.
Additional Financial Information
Cash and Cash Equivalents. At Dec. 31, 2012,
total cash was $89.4 million, representing an increase of $3.7
million from total cash as of Dec. 31, 2011.
Debt. At Dec. 31, 2012, the face amount of
our outstanding debt was $1.92 billion, a decrease of $15.4 million
from Dec. 31, 2011. Net repayments in the fourth quarter of 2012
totaled $3.0 million. As of Dec. 31, 2012, we had $496.0 million
available for borrowing under the revolving credit facility. At
Dec. 31, 2012, our Total Net Leverage Ratio (as defined in the
senior credit facility) was required to be no more than 6.50:1. As
of that date, our Total Net Leverage Ratio was 5.08:1.
Capital Expenditures. For the quarters
ended Dec. 31, 2012 and 2011, capital expenditures totaled $50.0
million and $36.5 million, respectively. Fourth quarter 2012
capital expenditures included $31.6 million associated with the
Lake Charles construction project. The fourth quarter 2011 capital
expenditures included a $9.3 million litigation settlement payment
to the general contractor for our St. Charles hotel construction
project completed in 2008. For the years ended Dec. 31, 2012 and
2011, capital expenditures were $133.1 million and $82.6 million,
respectively.
Dividends. During the fourth quarter of
2012, our Board of Directors declared a cash dividend of $0.125 per
share, which we paid on Dec. 14, 2012. On Feb. 6, 2013, the Board
declared a cash dividend of $0.125 per share, payable on March 15,
2013 to stockholders of record on Feb. 28, 2013.
Outlook
In the first quarter of 2013, we currently expect:
- depreciation to range from $24.5 million to $25.5 million.
- interest expense, net of capitalized interest, to be between
$28.5 million and $29.5 million, including non-cash interest
expense of approximately $1.3 million.
- the combined state and federal income tax rate to be in the
range of 40% to 42%.
- capital spending of $49.0 million to $54.0 million, including
approximately $15.0 million for maintenance capital expenditures
and $36.0 million related to Lake Charles design and construction
costs.
- non-cash stock-based compensation expense of $3.6 million to
$4.1 million.
- corporate expense, including merger costs and excluding
corporate's portion of non-cash stock-based compensation expense,
to be between $13.5 million and $14.0 million.
Pending Merger As previously announced, on
Dec. 20, 2012, Ameristar Casinos, Inc. entered into an agreement
and plan of merger with Pinnacle Entertainment, Inc., pursuant to
which Pinnacle will acquire all of the outstanding common shares of
Ameristar for $26.50 per share in cash. The merger is subject to
customary closing conditions, required regulatory approvals and
approval by Ameristar's stockholders. The transaction is expected
to close in the second or third quarter of 2013.
Ameristar and Pinnacle filed the required Hart-Scott-Rodino
premerger notification and report forms on Jan. 11, 2013. Pinnacle
has filed applications for regulatory approvals as required under
applicable gaming laws. On Feb. 1, 2013, Ameristar filed a
preliminary proxy statement with the Securities and Exchange
Commission (SEC) relating to a special meeting of Ameristar's
stockholders to consider and approve the merger agreement. No
assurance can be given that the merger will be completed.
Additional Information about the Pending Merger
and Where to Find It This press release may be deemed to be
solicitation material in respect of the pending merger of Pinnacle
and Ameristar. In connection with the proposed merger, Ameristar
has filed a preliminary proxy statement with the SEC and will later
file a definitive proxy statement and mail it to its stockholders.
INVESTORS AND AMERISTAR'S STOCKHOLDERS ARE URGED TO READ CAREFULLY
THE PRELIMINARY AND DEFINITIVE PROXY STATEMENTS AND OTHER PROXY
MATERIALS THAT AMERISTAR FILES WITH THE SEC AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
AMERISTAR, THE MERGER AND RELATED MATTERS. The preliminary and
definitive proxy statements and other relevant materials, and any
other documents filed by Ameristar with the SEC, may be obtained
free of charge at the SEC's website at www.sec.gov. In addition,
stockholders can obtain free copies of the proxy statement from
Ameristar by contacting Ameristar's Investor Relations Department
by telephone at (702) 567-7000, or by mail at Ameristar Casinos,
Inc., 3773 Howard Hughes Parkway, Suite 490 South, Las Vegas,
Nevada 89169, Attention: Investor Relations Department, or at
Ameristar's website at www.ameristar.com.
Participants in the Solicitation Ameristar
and its directors and executive officers and other persons may be
deemed to be participants in the solicitation of proxies from the
stockholders of Ameristar in connection with the pending merger.
Information about Ameristar's directors and executive officers is
included in our Annual Report on Form 10-K for the year ended Dec.
31, 2011 and the proxy statement for our 2012 Annual Meeting of
Stockholders, filed with the SEC on April 30, 2012. Additional
information regarding the interests of Ameristar's directors and
executive officers in the merger is included in the preliminary
proxy statement for the special meeting of Ameristar's stockholders
and will be included in the definitive proxy statement described
above.
Forward-Looking Information This release
contains certain forward-looking information that generally can be
identified by the context of the statement or the use of
forward-looking terminology, such as "believes," "estimates,"
"anticipates," "intends," "expects," "plans," "is confident that,"
"should," "could," "would," "will" or words of similar meaning,
with reference to Ameristar or our management. Similarly,
statements that describe our future plans, objectives, strategies,
financial results or position, operational expectations or goals
are forward-looking statements. It is possible that our
expectations may not be met due to various factors, many of which
are beyond our control, and we therefore cannot give any assurance
that such expectations will prove to be correct. For a discussion
of relevant factors, risks and uncertainties that could materially
affect our future results, attention is directed to "Item 1A. Risk
Factors" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report
on Form 10-K for the year ended Dec. 31, 2011, "Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Quarterly Report on Form 10-Q for the
quarter ended Sept. 30, 2012, and "Item 1A. Risk Factors" in our
Quarterly Report on Form 10-Q for the quarter ended June 30,
2012.
On a monthly basis, gaming regulatory authorities in certain
states in which we operate publish gross gaming revenue and/or
certain other financial information for the gaming facilities that
operate within their respective jurisdictions. Because various
factors in addition to our gross gaming revenue (including
operating costs, promotional allowances and corporate and other
expenses) influence our operating income, Adjusted EBITDA and
diluted earnings per share, such reported information, as it
relates to Ameristar, may not accurately reflect the results of our
operations for such periods or for future periods.
About Ameristar Ameristar Casinos is an
innovative casino gaming company featuring the newest and most
popular slot machines. Our 7,200 dedicated team members pride
themselves on delivering consistently friendly and appreciative
service to our guests. We continuously strive to increase the
loyalty of our guests through the quality of our slot machines,
table games, hotel, dining and other leisure offerings. Our eight
casino hotel properties primarily serve guests from Colorado,
Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi,
Missouri, Nebraska and Nevada. We began construction on our ninth
property, a casino resort in Lake Charles, La., in July 2012, which
we expect will open in the third quarter of 2014. We have been a
public company since 1993, and our stock is traded on the Nasdaq
Global Select Market. We generate more than $1 billion in net
revenues annually.
Visit Ameristar Casinos' website at www.ameristar.com (which
shall not be deemed to be incorporated in or a part of this news
release).
Please refer to the tables at the end of this release for the
reconciliation of the non-GAAP financial measures Adjusted EBITDA
and Adjusted EPS reported throughout this release. Additionally,
more information on these non-GAAP financial measures can be found
under the caption "Use of Non-GAAP Financial Measures" at the end
of this release.
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
---------- ---------- ---------- ----------
REVENUES:
Casino $ 298,498 $ 305,040 $1,228,958 $1,248,616
Food and beverage 36,037 34,067 139,565 138,192
Rooms 19,152 18,842 77,698 77,870
Other 6,653 6,954 27,957 28,905
---------- ---------- ---------- ----------
360,340 364,903 1,474,178 1,493,583
Less: promotional allowances (71,513) (68,741) (278,957) (279,077)
---------- ---------- ---------- ----------
Net revenues 288,827 296,162 1,195,221 1,214,506
OPERATING EXPENSES:
Casino 134,385 135,113 537,862 548,635
Food and beverage 13,599 14,484 53,634 54,414
Rooms 2,031 2,340 8,121 8,266
Other 2,452 2,701 9,761 10,669
Selling, general and
administrative 68,337 69,808 251,395 259,151
Depreciation and
amortization 25,761 27,264 106,317 105,922
Impairment of fixed assets 9,563 245 9,563 245
Net loss (gain) on
disposition of assets 208 79 408 (45)
---------- ---------- ---------- ----------
Total operating expenses 256,336 252,034 977,061 987,257
Income from operations 32,491 44,128 218,160 227,249
OTHER INCOME (EXPENSE):
Interest income 5 12 44 15
Interest expense, net of
capitalized interest (29,383) (27,090) (114,740) (106,623)
Loss on early retirement
of debt - - - (85,311)
Other - 508 835 (784)
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX
PROVISION 3,113 17,558 104,299 34,546
Income tax provision 1,898 10,179 27,964 27,752
---------- ---------- ---------- ----------
NET INCOME $ 1,215 $ 7,379 $ 76,335 $ 6,794
========== ========== ========== ==========
EARNINGS PER SHARE:
Basic $ 0.04 $ 0.23 $ 2.32 $ 0.17
========== ========== ========== ==========
Diluted $ 0.04 $ 0.22 $ 2.26 $ 0.17
========== ========== ========== ==========
CASH DIVIDENDS DECLARED PER
SHARE $ 0.125 $ 0.105 $ 0.50 $ 0.42
========== ========== ========== ==========
WEIGHTED-AVERAGE SHARES
OUTSTANDING:
Basic 32,837 32,681 32,906 40,242
========== ========== ========== ==========
Diluted 34,225 34,014 33,743 41,136
========== ========== ========== ==========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands)
(Unaudited)
December 31, 2012 December 31, 2011
---------------------- ----------------------
Balance sheet data
Cash and cash equivalents $ 89,392 $ 85,719
Total assets $ 2,074,274 $ 2,012,039
Total debt, including net
discount of $926 and
$8,258 $ 1,917,979 $ 1,926,064
Stockholders' deficit $ (22,259) $ (90,578)
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Consolidated cash flow
information
Net cash provided by
operating activities $ 20,901 $ 44,070 $ 223,970 $ 253,349
Net cash used in investing
activities $ (41,359) $ (33,608) $ (180,824) $ (52,283)
Net cash used in financing
activities $ (6,461) $ (16,658) $ (39,473) $ (186,533)
Net revenues
Ameristar St. Charles $ 66,424 $ 66,129 $ 268,928 $ 269,759
Ameristar Kansas City 51,435 55,939 211,791 226,054
Ameristar Council Bluffs 40,262 40,675 166,003 164,523
Ameristar Black Hawk 38,649 38,143 160,212 153,203
Ameristar Vicksburg 27,701 28,133 119,766 118,094
Ameristar East Chicago 50,817 52,773 210,482 221,893
Jackpot Properties 13,539 14,370 58,039 60,980
---------- ---------- ---------- ----------
Consolidated net
revenues $ 288,827 $ 296,162 $1,195,221 $1,214,506
========== ========== ========== ==========
Operating income (loss)
Ameristar St. Charles $ 15,159 $ 14,347 $ 68,163 $ 68,908
Ameristar Kansas City 13,698 15,268 61,400 66,088
Ameristar Council Bluffs 13,474 13,977 60,635 57,962
Ameristar Black Hawk 8,607 9,877 40,733 37,562
Ameristar Vicksburg 7,828 7,923 39,719 38,365
Ameristar East Chicago 5,002 3,920 21,100 22,445
Jackpot Properties 2,418 2,419 11,567 13,642
Corporate and other (33,695) (23,603) (85,157) (77,723)
---------- ---------- ---------- ----------
Consolidated operating
income $ 32,491 $ 44,128 $ 218,160 $ 227,249
========== ========== ========== ==========
Adjusted EBITDA
Ameristar St. Charles $ 22,531 $ 22,333 $ 96,231 $ 96,885
Ameristar Kansas City 17,433 19,195 76,159 81,448
Ameristar Council Bluffs 15,598 15,671 68,816 66,182
Ameristar Black Hawk 13,160 14,518 58,770 56,009
Ameristar Vicksburg 11,783 11,773 54,768 53,361
Ameristar East Chicago 8,531 8,477 38,853 39,921
Jackpot Properties 3,894 4,119 17,279 19,507
Corporate and other (12,540) (11,834) (49,291) (48,177)
---------- ---------- ---------- ----------
Consolidated Adjusted
EBITDA $ 80,390 $ 84,252 $ 361,585 $ 365,136
========== ========== ========== ==========
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL DATA - CONTINUED
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
-------- -------- -------- --------
Operating income margins (1)
Ameristar St. Charles 22.8% 21.7% 25.3% 25.5%
Ameristar Kansas City 26.6% 27.3% 29.0% 29.2%
Ameristar Council Bluffs 33.5% 34.4% 36.5% 35.2%
Ameristar Black Hawk 22.3% 25.9% 25.4% 24.5%
Ameristar Vicksburg 28.3% 28.2% 33.2% 32.5%
Ameristar East Chicago 9.8% 7.4% 10.0% 10.1%
Jackpot Properties 17.9% 16.8% 19.9% 22.4%
Consolidated operating income
margin 11.2% 14.9% 18.3% 18.7%
Adjusted EBITDA margins (2)
Ameristar St. Charles 33.9% 33.8% 35.8% 35.9%
Ameristar Kansas City 33.9% 34.3% 36.0% 36.0%
Ameristar Council Bluffs 38.7% 38.5% 41.5% 40.2%
Ameristar Black Hawk 34.1% 38.1% 36.7% 36.6%
Ameristar Vicksburg 42.5% 41.8% 45.7% 45.2%
Ameristar East Chicago 16.8% 16.1% 18.5% 18.0%
Jackpot Properties 28.8% 28.7% 29.8% 32.0%
Consolidated Adjusted EBITDA
margin 27.8% 28.4% 30.3% 30.1%
(1) Operating income margin is operating income (loss) as a
percentage of net revenues. (2) Adjusted EBITDA margin is Adjusted
EBITDA as a percentage of net revenues.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following tables set forth reconciliations of operating income (loss), a
GAAP financial measure, to Adjusted EBITDA, a non-GAAP financial measure.
Three Months Ended December 31, 2012
---------------------------------------------------
Impairment
Loss and
Loss (Gain)
Operating Depreciation on
Income and Disposition Stock-Based
(Loss) Amortization of Assets Compensation
---------- ------------ ----------- -------------
Ameristar St. Charles $ 15,159 $ 7,096 $ - $ 276
Ameristar Kansas City 13,698 3,396 9 330
Ameristar Council Bluffs 13,474 1,904 12 208
Ameristar Black Hawk 8,607 4,370 - 183
Ameristar Vicksburg 7,828 3,726 - 229
Ameristar East Chicago 5,002 3,278 (7) 258
Jackpot Properties 2,418 1,283 - 193
Corporate and other (33,695) 708 9,757 3,828
---------- ------------ ----------- -------------
Consolidated $ 32,491 $ 25,761 $ 9,771 $ 5,505
========== ============ =========== =============
Three Months Ended December 31, 2012
------------------------------------
Non-
Non- Capitalizable
Operational Lake Charles
Professional Development Adjusted
Fees Costs EBITDA
------------ ------------- --------
Ameristar St. Charles $ - $ - $ 22,531
Ameristar Kansas City - - 17,433
Ameristar Council Bluffs - - 15,598
Ameristar Black Hawk - - 13,160
Ameristar Vicksburg - - 11,783
Ameristar East Chicago - - 8,531
Jackpot Properties - - 3,894
Corporate and other 6,669 193 (12,540)
------------ ------------- --------
Consolidated $ 6,669 $ 193 $ 80,390
============ ============= ========
Three Months Ended December 31, 2011
-----------------------------------------------------
Impairment
Loss and
(Gain) Loss
Operating Depreciation on
Income and Disposition Stock-Based
(Loss) Amortization of Assets Compensation
------------ ------------ ------------ ------------
Ameristar St. Charles $ 14,347 $ 7,468 $ (10) $ 528
Ameristar Kansas City 15,268 3,700 - 227
Ameristar Council
Bluffs 13,977 1,885 - 303
Ameristar Black Hawk 9,877 4,401 - 240
Ameristar Vicksburg 7,923 3,546 - 303
Ameristar East Chicago 3,920 4,337 89 131
Jackpot Properties 2,419 1,283 - 417
Corporate and other (23,603) 644 245 10,186
------------ ------------ ------------ ------------
Consolidated $ 44,128 $ 27,264 $ 324 $ 12,335
============ ============ ============ ============
Three Months Ended December 31, 2011
----------------------------------------------
Deferred Net River
Compensation Flooding
Plan Expense (Reimbursements) Adjusted
(1) Expenses (2) EBITDA
------------- ---------------- -------------
Ameristar St. Charles $ - $ - $ 22,333
Ameristar Kansas City - - 19,195
Ameristar Council
Bluffs - (494) 15,671
Ameristar Black Hawk - - 14,518
Ameristar Vicksburg - 1 11,773
Ameristar East Chicago - - 8,477
Jackpot Properties - - 4,119
Corporate and other 694 - (11,834)
------------- ---------------- -------------
Consolidated $ 694 $ (493) $ 84,252
============= ================ =============
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the condensed consolidated
statements of operations. (2) River flooding expenses are net of
insurance reimbursements and represent non-capitalizable costs
incurred to reduce exposure to significant property damage from
extraordinary flood levels, as well as required flood cleanup
costs.
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED EBITDA - CONTINUED
(Dollars in Thousands) (Unaudited)
Year Ended December 31, 2012
-------------------------------------------------------------
Impairment
Loss and
(Gain) Loss Deferred
Operating Depreciation on Compensation
Income and Disposition Stock-Based Plan Expense
(Loss) Amortization of Assets Compensation (1)
--------- ------------ ----------- ------------ ------------
Ameristar St.
Charles $ 68,163 $ 27,488 $ (150)$ 730 $ -
Ameristar
Kansas City 61,400 14,248 (100) 611 -
Ameristar
Council
Bluffs 60,635 7,844 (88) 558 -
Ameristar
Black Hawk 40,733 17,618 (72) 491 -
Ameristar
Vicksburg 39,719 14,428 (1) 622 -
Ameristar East
Chicago 21,100 16,559 603 591 -
Jackpot
Properties 11,567 5,149 22 541 -
Corporate and
other (85,157) 2,983 9,757 14,109 1,227
--------- ------------ ----------- ------------ ------------
Consolidated $ 218,160 $ 106,317 $ 9,971 $ 18,253 $ 1,227
========= ============ =========== ============ ============
Year Ended December 31, 2012
--------------------------------------------------
Non-
Non- Capitalizable
Operational Lake Charles Net River
Professional Development Flooding Adjusted
Fees Costs Expenses (2) EBITDA
------------ ------------- ------------ --------
Ameristar St.
Charles $ - $ - $ - $ 96,231
Ameristar
Kansas City - - - 76,159
Ameristar
Council
Bluffs - - (133) 68,816
Ameristar
Black Hawk - - - 58,770
Ameristar
Vicksburg - - - 54,768
Ameristar East
Chicago - - - 38,853
Jackpot
Properties - - - 17,279
Corporate and
other 6,669 1,121 - (49,291)
------------ ------------- ------------ --------
Consolidated $ 6,669 $ 1,121 $ (133) $361,585
============ ============= ============ ========
Year Ended December 31, 2011
-------------------------------------------------
Impairment
Loss and
(Gain) Loss
Operating Depreciation on
Income and Disposition Stock-Based
(Loss) Amortization of Assets Compensation
--------- ------------ ----------- ------------
Ameristar St. Charles $ 68,908 $ 26,922 $ (6) $ 1,052
Ameristar Kansas City 66,088 14,855 (80) 585
Ameristar Council Bluffs 57,962 7,542 (105) 670
Ameristar Black Hawk 37,562 17,834 (21) 634
Ameristar Vicksburg 38,365 13,997 (1) 750
Ameristar East Chicago 22,445 16,854 156 466
Jackpot Properties 13,642 5,068 13 784
Corporate and other (77,723) 2,850 244 19,404
--------- ------------ ----------- ------------
Consolidated $ 227,249 $ 105,922 $ 200 $ 24,345
========= ============ =========== ============
Year Ended December 31, 2011
------------------------------------------------
Deferred Non-
Compensation Operational Net River
Plan Expense Professional Flooding Adjusted
(1) Fees Expenses (2) EBITDA
------------ ------------ ------------ --------
Ameristar St. Charles $ - $ - $ 9 $ 96,885
Ameristar Kansas City - - - 81,448
Ameristar Council Bluffs - - 113 66,182
Ameristar Black Hawk - - - 56,009
Ameristar Vicksburg - - 250 53,361
Ameristar East Chicago - - - 39,921
Jackpot Properties - - - 19,507
Corporate and other 75 6,973 - (48,177)
------------ ------------ ------------ --------
Consolidated $ 75 $ 6,973 $ 372 $365,136
============ ============ ============ ========
(1) Deferred compensation plan expense represents the change in
the Company's non-cash liability based on plan participant
investment results. This expense is included in selling, general
and administrative expenses in the condensed consolidated
statements of operations. (2) River flooding expenses are net of
insurance reimbursements and represent non-capitalizable costs
incurred to reduce exposure to significant property damage from
extraordinary flood levels, as well as required flood cleanup
costs.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Dollars in Thousands) (Unaudited)
The following table sets forth a reconciliation of consolidated net income,
a GAAP financial measure, to consolidated Adjusted EBITDA, a non-GAAP
financial measure.
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Net income $ 1,215 $ 7,379 $ 76,335 $ 6,794
Income tax provision 1,898 10,179 27,964 27,752
Interest expense, net of
capitalized interest 29,383 27,090 114,740 106,623
Interest income (5) (12) (44) (15)
Other - (508) (835) 784
Net loss (gain) on disposition
of assets 208 79 408 (45)
Impairment of fixed assets 9,563 245 9,563 245
Depreciation and amortization 25,761 27,264 106,317 105,922
Stock-based compensation 5,505 12,335 18,253 24,345
Non-operational professional
fees 6,669 - 6,669 6,973
Non-capitalizable Lake Charles
development costs 193 - 1,121 -
Deferred compensation plan
expense - 694 1,227 75
Loss on early retirement of
debt - - - 85,311
Net river flooding
(reimbursements) expenses - (493) (133) 372
---------- ---------- ---------- ----------
Adjusted EBITDA $ 80,390 $ 84,252 $ 361,585 $ 365,136
========== ========== ========== ==========
RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS
(Shares in Thousands) (Unaudited)
The following table sets forth a reconciliation of diluted earnings per
share (EPS), a GAAP financial measure, to adjusted diluted earnings per
share (Adjusted EPS), a non-GAAP financial measure.
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Diluted earnings per share
(EPS) $ 0.04 $ 0.22 $ 2.26 $ 0.17
Non-operational professional
fees 0.11 - 0.12 0.14
Impairment of fixed assets 0.17 - 0.17 -
Cumulative effect from tax
elections - - (0.47) -
Non-capitalizable Lake
Charles development costs - - 0.02 -
Loss on early retirement of
debt - - - 1.34
Non-cash tax provision
impact from change in
Indiana state tax rate - - - 0.08
Net river flooding
(reimbursements) expenses - (0.01) - 0.01
---------- ---------- ---------- ----------
Adjusted diluted earnings per
share (Adjusted EPS) $ 0.32 $ 0.21 $ 2.10 $ 1.74
========== ========== ========== ==========
Weighted-average diluted
shares outstanding used in
calculating Adjusted EPS 34,225 34,014 33,743 41,136
========== ========== ========== ==========
Use of Non-GAAP Financial Measures
Securities and Exchange Commission Regulation G, "Conditions for
Use of Non-GAAP Financial Measures," prescribes the conditions for
use of non-GAAP financial information in public disclosures. We
believe our presentation of the non-GAAP financial measures
Adjusted EBITDA and Adjusted EPS are important supplemental
measures of operating performance to investors. The following
discussion defines these terms and explains why we believe they are
useful measures of our performance.
Adjusted EBITDA is a commonly used measure of performance in the
gaming industry that we believe, when considered with measures
calculated in accordance with United States generally accepted
accounting principles, or GAAP, gives investors a more complete
understanding of operating results before the impact of investing
and financing transactions, income taxes and certain non-cash and
non-recurring items and facilitates comparisons between us and our
competitors.
Adjusted EBITDA is a significant factor in management's internal
evaluation of total Company and individual property performance and
in the evaluation of incentive compensation for employees.
Therefore, we believe Adjusted EBITDA is useful to investors
because it allows greater transparency related to a significant
measure used by management in its financial and operational
decision-making and because it permits investors similarly to
perform more meaningful analyses of past, present and future
operating results and evaluations of the results of core ongoing
operations. Furthermore, we believe investors would, in the absence
of the Company's disclosure of Adjusted EBITDA, attempt to use
equivalent or similar measures in assessment of our operating
performance and the valuation of our Company. We have reported
Adjusted EBITDA to our investors in the past and believe its
inclusion at this time will provide consistency in our financial
reporting.
Adjusted EBITDA, as used in this press release, is earnings
before interest, taxes, depreciation, amortization, other
non-operating income and expenses, stock-based compensation,
deferred compensation plan expense, non-operational professional
fees, non-capitalizable development costs, impairment loss, loss on
early retirement of debt and river flooding expenses and
reimbursements. In future periods, the calculation of Adjusted
EBITDA may be different than in this release. The foregoing tables
reconcile Adjusted EBITDA to operating income (loss) and net
income, based upon GAAP.
Adjusted EPS, as used in this press release, is diluted earnings
per share, excluding the after-tax per-share impact of loss on
early retirement of debt, the cumulative effect from tax elections,
non-operational professional fees, non-capitalizable development
costs, impairment loss, non-cash tax provision impact from state
tax rate change and river flooding expenses and reimbursements.
Management adjusts EPS, when deemed appropriate, for the evaluation
of operating performance because we believe that the exclusion of
certain items is necessary to provide the most accurate measure of
our core operating results and as a means to compare
period-to-period results. We have chosen to provide this
information to investors to enable them to perform more meaningful
analysis of past, present and future operating results and as a
means to evaluate the results of our core ongoing operations.
Adjusted EPS is a significant factor in the internal evaluation of
total Company performance. Management believes this measure is used
by investors in their assessment of our operating performance and
the valuation of our Company. In future periods, the adjustments we
make to EPS in order to calculate Adjusted EPS may be different
than or in addition to those made in this release. The foregoing
table reconciles EPS to Adjusted EPS.
Limitations on the Use of Non-GAAP Measures The use of Adjusted
EBITDA and Adjusted EPS has certain limitations. Our presentation
of Adjusted EBITDA and Adjusted EPS may be different from the
presentations used by other companies and therefore comparability
among companies may be limited. Depreciation expense for various
long-term assets, interest expense, income taxes and other items
have been and will be incurred and are not reflected in the
presentation of Adjusted EBITDA. Each of these items should also be
considered in the overall evaluation of our results. Additionally,
Adjusted EBITDA does not consider capital expenditures and other
investing activities and should not be considered as a measure of
our liquidity. We compensate for these limitations by providing the
relevant disclosure of our depreciation, interest and income tax
expense, capital expenditures and other items both in our
reconciliations to the GAAP financial measures and in our
consolidated financial statements, all of which should be
considered when evaluating our performance.
Adjusted EBITDA and Adjusted EPS should be used in addition to
and in conjunction with results presented in accordance with GAAP.
Adjusted EBITDA and Adjusted EPS should not be considered as an
alternative to net income, operating income or any other operating
performance measure prescribed by GAAP, nor should these measures
be relied upon to the exclusion of GAAP financial measures.
Adjusted EBITDA and Adjusted EPS reflect additional ways of viewing
our operations that we believe, when viewed with our GAAP results
and the reconciliations to the corresponding GAAP financial
measures, provide a more complete understanding of factors and
trends affecting our business than could be obtained absent this
disclosure. Management strongly encourages investors to review our
financial information in its entirety and not to rely on a single
financial measure.
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CONTACT: Tom Steinbauer Senior Vice President, Chief
Financial Officer Ameristar Casinos, Inc. 702-567-7000
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